Mortgage Commission v. Great Neck Improvement Co.

162 Misc. 416, 295 N.Y.S. 107, 1937 N.Y. Misc. LEXIS 1634
CourtNew York Supreme Court
DecidedMarch 31, 1937
StatusPublished
Cited by18 cases

This text of 162 Misc. 416 (Mortgage Commission v. Great Neck Improvement Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mortgage Commission v. Great Neck Improvement Co., 162 Misc. 416, 295 N.Y.S. 107, 1937 N.Y. Misc. LEXIS 1634 (N.Y. Super. Ct. 1937).

Opinion

Hallinan, J.

In this action to foreclose a mortgage on real property, the defendant Great Neck Improvement Company, a domestic corporation, served a notice of appearance and an answer containing an affirmative defense, subscribed in its corporate name, as appearing in person. The plaintiffs now move for an order striking out this answer upon the sole ground that a corporation cannot defend an action in person but must appear by a duly licensed attorney.

The question thus presented seems to have been passed upon by the courts of this State for the first time in the case of Sellent-Repent Corporation v. Queens Borough Gas & Electric Co. (160 Misc. 920), wherein Mr. Justice Brower, sitting in Special Term, Part I, of the Supreme Court in Kings county, held that a corporation may appear in person to prosecute or defend an action. Since the publication of that decision, the problem was discussed editorially in the New York Law Journal of March 3,1937 (p. 1064) and in a letter of Edwin M. Otterbourg, Esq., chairman of the committee on the unlawful practice of the law of New York County Lawyers Association of New York city, published in the New York Law Journal of March 23, 1937 (p. 1432). In addition I have been materially aided in the disposition of this motion, by the clear argument and thorough presentation of authorities in the brief of the attorney for the plaintiffs and that of the defendant Great Neck Improvement Company which in opposition to the motion submitted an affidavit and a brief again subscribed by it, in person.

The affidavit is by the president of the corporation, a member of its board of directors. He states that he is performing all acts in connection with the defense of this action solely by virtue of his office; that he has been promised and will receive no extra or additional compensation of any kind for whatever work or services he has or may hereafter render in connection with the defense of this action, which he and the board of directors regard as part of his duties as executive officer of the corporation; that he drew and verified the answer and drew the affidavit and brief in opposition to this motion; and that all acts in connection with this [418]*418action, other than purely ministerial duties, such as stenography,” have been personally performed by him.

It does not appear in the papers whether said president of the defendant corporation is a member of the bar of this State or any other State, or whether he has ever had any experience or training in the law. Nevertheless the draftsmanship and content of the papers submitted by him for the defendant corporation are such as an able member of the bar, in good standing in this State, might well havé prepared.

.Section 236 of the New York Civil Practice Act is the only provision in our civil practice dealing with appearance in person. It reads as follows: “ A party who is of full age may prosecute or defend a civil action in person or by attorney unless he has been judicially declared to be incompetent to manage his affairs. Where-ever in a statute or rule relating to the conduct of an action a reference is made to an attorney for a party it shall be deemed to include a party prosecuting or defending in person unless otherwise specially prescribed therein or unless that construction is manifestly repugnant to the context. If a party has an attorney in the action he cannot appear to act in person except with the consent of the Court.”

The language used in this section, “A party who is of full age * * * unless he has been judicially declared to be incompetent to manage his affairs,” makes no mention of either a person ” or “ a corporation.” Leave to prosecute or defend an action in person ” is granted only to “ a party of full age,” not “ incompetent.”

Section 55 of the Code of Civil Procedure, which was superseded by section 236 of the Civil Practice Act, had the following language: “ A party * * * who is of full age, may prosecute or defend same in person or by attorney, at his election, unless he has been judicially declared to be incompetent to manage his affairs.”

Thus, the language of both the Code and the Civil Practice Act gave the right to appear in person only to “a party of full age.” The choice of the words a party of full age ” is indicative of the intent to exclude minors, incompetents and corporations, and to change the common law to the extent of permitting a natural person of full age and of sound mind only to prosecute or defend a case in his own behalf. At common law a corporation was incapable of appearing in person in an action. (1 Coke Litt. [1st Am. ed.] § 90, 66b; 6 Comyn’s Digest, Pleader 2, B2; 1 Chitty [16th Am. ed.], p. 551.) Originally, corporations were part of the sovereign and could neither sue nor be sued. (1 Coke Litt. supra.) Eventually this rule was relaxed to permit corporations to sue or be sued, that is, to become either party plaintiffs or party defendants. [419]*419Section 3 of article 8 of the present New York State Constitution provides, as it did in the amended Constitution of 1846: “all corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons.”

This provision gives to corporations the same protection and subjects them to the same liability which would involve an individual under the same circumstances. (Williams v. Village of Port Chester, 97 App. Div. 84; affd., 183 N. Y. 550.) It does not give to a corporation the right to appear in person. It bears in no way upon the interpretation of section 236 of the Civil Practice Act, which was enacted subsequently, so long as a suit may be brought by or against a corporation.

The defendant contends that the right of a corporation to conduct or defend litigation in its own behalf, in person, through its regular officers, was recognized by the Legislature when it enacted section 280 of the Penal Law, which in part reads as follows: “ It shall be unlawful for any corporation or voluntary association to practice or appear as an attorney-at-law for any person other than itself in any court in this State or before any judicial body, or to make it a business to practice as an attorney-at-law, for any person other than itself, in any of said courts.”

The argument is advanced that this statute prohibiting corporations in New York from practicing law expressly authorizes, if not in so many words at least by specific exclusion and clear implication, the right of a corporation to prosecute and defend actions in person, because the prohibition in this section is as to all persons “ other than itself.”

It is true that a corporation may not be prosecuted under this section for interposing an answer in its own name, as a defendant in person, but that does not change the provisions of section 238 of the Civil Practice Act, which do not give a corporation the power to prosecute or defend an action in person.

Section 280 of the Penal Law was not intended nor can it be construed to grant authority even by implication, to a corporation to do that which under the civil law it has no power to do. The statute was designed to 'prohibit improper functions on the part of corporations and others. It was designed to put a stop to a rapidly growing practice by impersonal corporations of exercising functions which can properly be exercised only by a duly admitted and licensed attorney, who is under the direct supervision of the court and amenable to its discipline.

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Bluebook (online)
162 Misc. 416, 295 N.Y.S. 107, 1937 N.Y. Misc. LEXIS 1634, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mortgage-commission-v-great-neck-improvement-co-nysupct-1937.